No Effect from Huge Fine Increases?

18/11/2013 09:22

Earlier this month Two Dunedin companies fined for workplace accidents Injuries to two workers in separate Dunedin workplace accidents have had their sequels in the Dunedin District Court today. Everitt Enterprises Limited was fined $40,000 (but will have to pay only $30,000 because of financial circumstances) and ordered to pay reparations to the victim of $10,500 following a fall from height while dismantling Allied Press’ printing press in May last year.

Harraway and Sons was fined $22,500 and ordered to pay reparations to the victim of $12,500. However, the company had already paid the victim $6060 so the final reparations to be paid will be $6440. The worker lost the tips of two fingers in a machine in January this year. Both companies were charged under section 6 of the Health and Safety in Employment Act – failing to take all practicable steps to ensure the safety of an employee while at work. The maximum fine is $250,000.

Under proposed new Health and Safety legislation maximum fines will be raised to $3 million for a body corporate, and $600,000 or five years imprisonment for an individual (or both), who commits the most serious offences involving reckless conduct that exposes people to serious risks.

The vast majority of small business in New Zealand wouldnt be able to pay the current maximum without going out of business. This is reflected in court decisions which have limited fines to what can be afforded by companies. Fifty-five per cent of all fines imposed are less than $30,000 (12% of the maximum) and 92% are less than $50,000 (20% of the maximum).

So what effect will larger fines have as an incentive for to provide safe and healthy working environments?